PERTH: Primewest Group acquired a 100% interest in GoFARM Asset Management Pty Ltd for $10 million.
GoFARM is the manager of ASX listed, Vitalharvest Freehold Trust (VTH). Primewest has separately acquired an 11.8% strategic interest in VTH. Primewest has also acquired a right of first refusal over a further 6.2% interest in VTH, subject to certain conditions.
VTH is an externally managed real estate investment trust providing investors with exposure to real agricultural property assets whose earnings profile and underlying value are exposed to the growing global agricultural demand for nutritious, healthy food. VTH currently holds circa $275 million in investment properties with a market capitalisation of approximately $143 million.
VTH owns Australia’s largest aggregation of berry and citrus farms which are 100% leased to Australia’s largest horticultural company, Costa Group Holdings Limited. The portfolio has a weighted average lease expiry of 6.5 years. The tenant holds an option for a further 10 year period, and in exercising this, provides significant future rent growth through an uncapped market rent review at the end of the initial lease term in 2026.
John Bond, Executive Chairman of Primewest said: “This transaction is an exciting step forward for Primewest and consistent with the strategy to expand our distribution capability into listed A-REITs. Importantly, Primewest will co-invest along with other Vital Harvest Trust investors as its largest investor. We look forward to working with VTH’s existing investors in its next stage of growth”.
It is intended that Vital Harvest Trust will be renamed the Primewest Agri-chain Fund (the Fund).
Primewest intends to pursue a growth path focusing on extending the Fund’s exposure to real agricultural property assets whose earnings profile and underlying value are exposed to the growing global demand for nutritious, healthy food. It also identifies an opportunity to extend this strategy into agri-logistics related assets.
To this end, with investor support, the Fund will look to opportunities that are focused not only on production but processing, storage and delivery of food or other products within the agricultural supply chain.
David Schwartz, Managing Director of Primewest said, “The real agricultural property and agri-logistics sector is an exciting sector with strong fundamentals. By expanding our investment opportunities to include the broader food supply chain, we believe we can attract a broader investor universe to support the Fund’s growth. We aim to create Australasia’s leading pure play agri-chain A-REIT which leverages Australia and New Zealand’s position as a leading global agricultural supplier”.